Payroll Tax Cut Expires; How Much More Will You Pay?

The fiscal cliff deal reached by the White House and Senate Republicans wouldn’t extend the payroll-tax holiday. The biggest hit to 2013 growth appears likely to come from this tax break’s expiration on Monday.

The workers’ share of the Social Security payroll tax had been lowered by two percentage points for the past two years, to 4.2% from 6.2%, amounting to an annual income boost of $1,000 for a typical U.S. family earning $50,000 a year. It provided an increase of as much as $2,202 this year for a worker earning $110,100, the maximum wage subject to the payroll tax.

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